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The OECD increased its inflation forecast and it would reach 250% this year

The OECD) Organization for Economic Cooperation and Development) estimates that inflation in Argentina will soar even more this year, up to 250.6%, after 134.5% in 2023, and the recession will worsen, with a decrease in the 2.3% activityclearly higher than anticipated days before the election of Javier Milei.

In its interim Outlook report, published this Monday, the OECD clearly worsens short-term projectionsabout Argentina, a country that is not a member of the entity, but is a member of the G20, in what can be understood as the integration of the effect of the “shock” policies of the new president.

The most striking thing is the explosion of inflation, since 250.6% is nothing less than 93.5 percentage points higher than the organization had anticipated at the end of November.

“General inflation accelerated at the end of 2023, which implies a strong carryover effect for average annual inflation in 2024,” he estimated.

OECD: what will happen to activity in 2024

According to the OECD, Argentina Not only was it the country of the three G20 whose GDP fell in 2023 that suffered the largest decline, -1% (the others were Saudi Arabia, with -0.9%, and Germany, with -0.1% ), but that will happen again this year.

In fact, in 2024 will be the only one with a contraction in activitywhich will be even higher, 2.3%.

Furthermore, since their last report at the end of November (published a dozen days before Javier Milei’s victory in the presidential elections), the organization’s experts have carried out with Argentina the largest revision of all the countries evaluated, and is a downward correction of one percentage point.

Fruits Vegetables Prices Inflation

This inflation prediction is 93.5% percentage higher than what the organization had anticipated at the end of November.

Mariano Fuchila

OECD: what is expected for 2025

The situation should improve in 2025, when they expect a recovery of 2.7% of the Argentine economy, seven tenths more than they had anticipated a little more than two months ago.

Inflation next year will moderate significantly, compared to 2024, but will still be 64.7%. that is, 17 times higher than the average for the G20 as a whole.

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